/KASE, June 30, 2016/ – Following a decision of Kazakhstan Stock Exchange
(KASE) Management Board of June 16, 2016 a redrafted KASE internal
document "Specification of Automatic Repo Market" (Specification) was
approved effective as of July 1, 2016.
The new version of the Specification is based on the existing document of the
same name and includes the following major amendments thereto.
1. The Specification defines the market price discounting procedure for the
shares and bonds used as repo subjects (previously the procedure was
determined by KASE internal document "Methodology of Securities Valuation").
2. The Specification addresses the market launch of repo transactions concluded
automatically with the subject being a basket of corporate securities (CS) from
the sector of KASE official list's "debt securities", denominated in tenge and
having an issue rating not lower than "BB-" on the international scale by the
rating agency Standard & Poor's or a similar level rating on the international
scale of another rating agency. The market prices of securities included in the
said CS basket are discounted based on their rating and maturity.
3. The redrafted Specification allows the use of not only shares from KASE
official list' first category and KASE index representative list shares, but
also KASE official list shares included in the representative list of stock
market indices of other countries as repo transactions subjects.
4. The Specification introduces a new procedure to discount a market price of
non-indexed government securities (GS) of the Republic of Kazakhstan,
denominated in tenge. Their prices are discounted:
by 5%, if there are not more than 180 days prior to the redemption of bonds;
by 7% with a term to maturity from 181 to 360 days;
by 10% with a term to maturity from 361 days to three years;
by 15% with a term of three to five years;
by 20% with a term of five to 10 years;
by 25% if there are more than 10 years remaining before maturity.
Before these GSs prices with a maturity not exceeding 360 days were discounted
by 5%, more than 360 days – by 10%.
We remind you that following a decision of the Exchange Board of Directors of
May 12, 2016 the Methodology of Securities Valuation was amended, so that for
the automatic repo purposes the non-indexed GS market price must be
represented by their nominal value including the accrued coupon interest not
paid as of the valuation date. These amendments will enter into force once the
redrafted Specification is put in effect. This means that as of July 1, 2016
KASE will use a new non-indexed GS discounting system, and this system will be
applicable to their nominal value including the accrued coupon.
5. The procedure to discount a market price of bonds of local executive
authorities of the Republic of Kazakhstan by 5% if before maturity there are not
more than 360 days following the valuation date, and in case of 360+ days –
15%.
On July 1, 2016 the current edition of the Specification will be recognized as
invalid.
• Specification effective before July 1, 2016,
http://www.kase.kz/files/normative_base/sp_repo_eng.pdf
• Specification effective as of July 1, 2016,
http://www.kase.kz/files/normative_base/sp_repo_new_eng.pdf
are currently available on KASE website.
[2016-06-30]